Cryptocurrency exchanges in India are finding it hard to conduct their businesses after some banks cut ties with them following the RBI’s directive. This latest development makes it tough for the exchanges to offer Rupee deposit and withdrawal services.
Indian Exchanges Are Struggling To Deal With Banks
Indian cryptocurrency exchanges are struggling to find viable, permanent payment solutions as banks in the country cut off ties with them. In a Reuters report earlier today, exchanges in the country are said to be struggling to provide payment solutions to their clients.
Industry sources told Reuters that the exchanges are seeking permanent solutions to this problem after banks and payment gateways started halting business activities with them. The struggle is a result of the central bank, the Reserve Bank of India (RBI), which had asked the banks and financial institutions to desist from supporting crypto transactions.
The move is controversial because cryptocurrencies are not banned in India. However, the RBI has always maintained that it doesn’t support cryptocurrencies because of their impact on financial stability. Hence, the reason why it had asked the banks to stay away from cryptocurrency exchanges.
Indian exchanges are seeking alternatives
Avinash Shekhar, a co-chief executive of ZebPay, one of India’s oldest crypto exchanges, said, “Banks are reluctant to do business. We have been talking to several payment partners, but the progress has been slow.”
Shekhar said the exchanges are already considering various options, including using smaller payment gateways, developing their own payment processors, delaying immediate settlements or offering only peer-to-peer transactions.
Despite the RBI’s directives, cryptocurrency investment and trading have grown tremendously in India over the past year. Recent reports revealed that Indian invested $40 billion in cryptocurrencies last year, up from $200 million in the previous year.
The investments come despite Bitcoin’s price still in bearish momentum. Bitcoin is trading below $34,000, down by over 40% from its all-time price above $64,000.
This article was originally posted on FX Empire